How to Get a Lower Rate on Your Credit Cards

Credit card companies offer various interest rates, or “APRs,” for their products. Customer with excellent credit ratings qualify for the best rates offered. Customers with fair to good credit will generally pay a higher APR on credit cards than those with excellent credit.

Individuals with poor credit may qualify for high interest credit cards or other options, such as secured credit cards. If you have a high interest rate on your credit cards, you can take a few steps to get a lower interest rate.

Call Your Credit Card Company

One way to get a lower interest rate on your existing credit card accounts is to call the company and ask for a reduction. Consumers are often surprised at how well such a request will work to get them a lower interest rate.

To request a lower rate from your credit card company, prepare for the call in advance. Know exactly what you are going to ask for on the call. Some people even write out a script for the call. During the call, you will need to gain access to the person who has the authority to change your interest rate. Once you have access to the authority, clearly state your request and wait for the response.

Navigating to the person with the authority to make the interest rate change is probably the most challenging aspect of the call. To get to this person, call the customer service number for your credit card company and make contact with a live operator. Simply ask the customer service representative if they have the authority to lower your interest rate. They will probably respond, “No.” Ask to speak with a supervisor or another person who has the authority to reduce your rate. You will eventually be connected with the key person.

When you speak with the key person, explain that you would like to have the interest rate on the card lowered. If you are facing extenuating circumstances, such as a major life change, state these issues as a reason for requesting the lower rates. Explain to the representative that lowering the interest rate would reduce your monthly expenses. Finally, state your proposed interest rate. It’s also a good idea to have a few competitor offers. You can mention these offers to see if the representative could match them.

Determine in advance your target interest rate. Ask for the rate, though the representative will probably counter-offer with a rate a bit higher. For example, if you have a card with an APR of 18.99, you could ask for an adjustment to an interest rate of 10.99. The representative may not lower your rate to 10.99. However, chances are that they will lower it a few points. Any reduction in interest charges is money in your pocket.

Transfer Balances

If your credit card company will not lower your rates, explore competing offers for balance transfer credit cards. Many credit cards offer 0 percent or low introductory APR rates on balances that you transfer from other cards. Generally, the low interest rates offered for these incentives increases after the first year. Make sure that the second-year interest rate is lower than your existing high interest card.

Credit card companies will often work with customers who frequently use their cards and carry a balance. If you rarely use your card, or if you don’t carry a balance, the credit card company has no incentive to work with you to keep your business. However, for consumers who have several credit cards with higher APRs, getting any break on interest rates can save hundreds of dollars per month.

Moreover, if you regularly use your cards, the credit card company does not want to lose your business through a balance transfer. Before you take advantage of one of the balance transfer offers, call your bank and see if they are willing to make you an APR reduction offer.